Standing Committee C

[Mr. Joe Benton in the Chair]

Home Energy Conservation Bill

Desmond Turner: I beg to move,
That, if proceedings on the Home Energy Conservation Bill are not concluded at this morning's sitting, the Committee do meet again this day at half-past Four o'clock.
 I must crave your indulgence, I fear, Mr. Benton. I ask the Committee, in addition to agreeing to the sittings motion, to agree to adjourn our proceedings until 11.45 am, as the Minister has to be elsewhere to deal with unexpected difficulties.

Joe Benton: May I point out that the appropriate technical word is ''suspend'', not ''adjourn''?

Desmond Turner: I beg your pardon, Mr. Benton.

Jonathan Sayeed: We accept that a Department that deals with flooding and foot and mouth, as well as fridges, needs its Ministers back in the office now and again. We do not oppose the sittings motion because we want time to discuss the entire Bill. We understand the Minister's difficulties and agree to the sittings motion and to the request for our sitting to be suspended.

Michael Meacher: I assure hon. Members that the request for an adjournment of the Committee until 11.45 am has nothing to do with BSE, foot and mouth or fridges—or, indeed, any other particular issue. However, the need for me to be elsewhere is pressing and I am grateful for the Committee's understanding. I look forward to making progress on the Bill at 11.45 am.
 Question put and agreed to. 
 Sitting suspended. 
 On resuming—

Clause 4 - Guidance on eradication of fuel poverty

Desmond Turner: I do not intend to move amendments Nos. 20 to 25, as they would cease to be relevant if new clause 8 replaced clause 4. Some believe that clause 4 is unnecessary, as its provisions are already in legislation. Although clause 4 contains weaknesses, I am confident that it is necessary. However, I am not confident that the drafting makes explicit the duty on local authorities with regard to fuel poverty.
 Question proposed, That the clause stand part of the Bill.

Joe Benton: With this it will be convenient to take new clause 8—Fuel Poverty—
'(1) It shall be the duty of every energy conservation authority, so far as is reasonably practicable, to— 
 (a) discharge its functions under sections 2 or 5 of the Home Energy Conservation Act 1995 (preparation of reports or further reports), and 
 (b) carry out its duty pursuant to section 1 of this Act in such a way as to complement and support the appropriate authority's strategy for the time being for the eradication of fuel poverty made under the Warm Homes and Energy Conservation Act 2000. 
 (2) The appropriate authority may from time to time give guidance to energy conservation authorities in relation to the discharge of their functions under subsection (1) above (and such guidance may differ for different authorities or different types of authority).'

Desmond Turner: New clause 8 makes explicit the link between the role of local authorities and the implementation of the Government's fuel poverty strategy. The Warm Homes and Energy Conservation Act 2000—another private Member's Bill—drives that strategy. We therefore continue to build on private Member's legislation, which has dominated the field.
 Local authorities should have a pivotal role in delivering the strategy. After all, they best know the circumstances of their boroughs and cities, and are best able to do what is necessary to co-ordinate available resources and to direct them to best effect. New clause 8 would not call upon fresh resources. We would get into difficulty with the Government if we implied that the Treasury would have to spend vast extra sums for which it had not budgeted. The new clause would make more effective use of the resources that are already available under the Warm Homes and Energy Conservation Act 2000 to remove fuel poverty. It would also give the Minister the power to issue guidance to local authorities on how best to achieve such a result. 
 I hope that the principles in the clause will be acceptable to the Committee.

Jonathan Sayeed: I do not intend to sound a note of dissension in what has been an harmonious Committee, but there is some order, counter-order and disorder about what has been going on, especially if we bear in mind that it is a few days since the Committee's last sitting. I hoped that the hon. Member for Brighton, Kemptown (Dr. Turner) and the Government might have come to a clearer decision about which clauses and amendments we would be considering. However, I do not want to introduce a sour note, as I am pleased to continue to offer my party's broad support for this part of the Bill.
 Members of the Committee have commented on the quality of the constructive dialogue and the cross-party support. Today's debate will prove crucial in that respect as we attempt to analyse the Government's suggested amendments to parts 2 and 3. It was evident in our debate on part 1 that hon. Members were not prepared to let the Government pledge one thing in public and do the opposite in the quiet of the Committee Room. I am pleased to note that the Government spectacularly failed in their attempt to neuter the Bill's provisions for energy efficiency. 
 The Government sought to omit the fuel poverty section of the Bill entirely and I am perplexed about why they should have attempted to do so. In 
 November, Age Concern statistics showed that 77 per cent of single pensioners and 43 per cent of older couples, of whom at least one is of pensioner age, are fuel poor. In Committee and on the Floor of the House, members of the Committee have praised the Bill's attempt to give local energy conservation authorities an increased sense of purpose and conviction to ensure that the fuel poverty strategy is adhered to and that targets are met. 
 As the explanatory notes set out, the Government must implement a strategy to end fuel poverty within 15 years, yet local authorities have identified problems in relations between local and central Government that have led to an unco-ordinated approach in efforts to meet that target. Indeed, the promoter of the Bill, the hon. Member for Brighton, Kemptown, subsequently sought to strengthen the Bill's impact in that respect and tabled amendments to replace all references to powers of enforcement from ''the Secretary of State'' with references to the ''appropriate authority'', although I recognise that his little speech a few moments ago may slightly amend that. However, ''appropriate authority'' is in the text of new clause 8. 
 The problem of governmental co-ordination has been highlighted for some time. Warm Zones Ltd., commenting on the difference in approaches to the eradication of fuel poverty by various local authorities, stated: 
''The fuel poverty return has been ignored by many local authorities. The consistency, adequacy, monitoring and enforcement of local authority performance on both fuel poverty and energy efficiency appear to need thorough review.''
 The Warm Homes and Energy Conservation Act 2000, introduced by my hon. Friend the Member for Southend, West (Mr. Amess), bound the Government to implement the previously mentioned strategy, which aims to end fuel poverty within 15 years. Until very recently, the Government were in agreement with the scope of the Act. In April 2000 the Minister stated: 
''This Government are committed to tackling fuel poverty, particularly among those households most at risk to ill health due to cold homes; the old, children, the disabled and the chronically sick. The two main causes of fuel poverty are low income and poor energy efficiency in the home.''—[Official Report, 6 April 2000; Vol. 347, c. 548W.]
 In February 2001, the Government launched a 10-year plan costing £1.5 billion a year that was designed to ensure that pensioners and other vulnerable people in England did not die of cold in their homes, reiterating their intention to eliminate all such deaths by 2010. Using statistics that showed that up to 50,000 elderly people may be dying in Britain every winter from cold, the Minister dramatically confirmed that the Government were declaring war on fuel poverty. As recently as December 2001, the Minister stated that the Bill would be helpful in further integrating local authorities' activities on fuel poverty and energy efficiency. However, the Government seem now to have decided on a more lackadaisical approach to the eradication of fuel poverty. Amendment No. 36 seeks to omit entirely the fuel poverty section of the Bill. 
 In the pre-Budget report 2001, commenting on winter fuel payments available for pensioners, the Government stated that 
''the winter fuel payment currently benefits around 8 million households with someone aged 60 or over each winter. The Government has already announced that the winter fuel payment for this year will be set at £200. To ensure that these households continue to receive help, the winter fuel payment will be maintained at £200 for the remainder of this Parliament. This will provide extra reassurance and security for all pensioners over the coming years.''
 Despite the Government's winter fuel payment strategy, last winter 22,700 older people in England and Wales died from cold-related causes. Commenting on that statistic, Mervyn Kohler of Help the Aged said: 
''This 'bulge' of winter deaths is a peculiarly British problem. When countries with much more severe winters than ours have much lower winter death rates, it becomes obvious that something is badly wrong. And behind these stark figures there must be an uncountable cost of extra illness, discomfort and sheer misery for our older population.''
 Fuel poverty is defined as the need for people to spend more than 10 per cent. of their household income on fuel to keep warm. Help the Aged affirms that the Government's strategy falls short on systematically attacking the problem of sub-standard housing and sub-standard heating facilities. The Government's winter fuel payment policy costs several times more than the amount earmarked for housing and heating improvements. While the winter fuel payment scheme has made an appreciable difference to many older people 's lives, it is wasted if it goes up the chimney or through the roof. 
 On the announcement of a fuel poverty strategy, the Minister admitted that the targets were ''challenging'', and continued to herald it as an important element of the Government's programme to tackle poverty and social exclusion. The provisions of the Bill would allow that challenge to be met. The Government's insistence on dropping the fuel poverty section of the Bill is inexplicable, especially in light of the Minister's argument in letters to the hon. Member for Burton (Mrs. Dean) and my hon. Friend the Member for Central Suffolk and Ipswich, North (Sir Michael Lord), on 14 December 2001 that 
''the Bill would help further integrate local authorities' activities on fuel poverty and energy efficiency. This would be helpful.''
 The Minister now appears to believe that including fuel poverty in the Bill is unnecessary and can be dealt with under the existing powers of the Home Energy Conservation Act 1995, known as HECA. That is not only inconsistent with his earlier position, but incorrect. It has been suggested that provision in the Bill is unnecessary because such guidance can already be given under HECA and may imply that the guidance cannot be implemented under HECA, thereby adversely affecting the power to give guidance in Scotland, where the Bill does not apply. However, the advice of two lawyers with experience in judicial review and administrative law is that that is plain wrong. Indeed, that is clearly demonstrated by section 4(1) of HECA. Under HECA, guidance can be given, but only about what should be included in reports. Section 4(1) reads: 
''The Secretary of State may, from time to time, give to energy conservation authorities such guidance as he considers appropriate 
in relation to the preparation of reports under section 2 or reports under section 3(2)(a).''
 In other words, the guidance powers under HECA are confined to HECA reports, and do not extend to guidance about implementation or mechanisms or co-ordinated action on fuel poverty, which is covered by new clause 8. Indeed, the Government's fuel poverty strategy points out in paragraph 3.13 that local authorities 
''have a role in tackling fuel Poverty'',
 but it also points out in paragraph 3.14 that currently local authorities' HECA activity 
''will not always be targeted only at the fuel poor.''
 What new clause 8 does is simple: it requires that HECA activity, 
''as far as is reasonably practicable'',
 complements the Government's fuel poverty activities. I believe that that is worth while. The current fuel poverty strategy has little about local authorities' role in the important matter of ending fuel poverty. True, there is the beacon council approach regarding best practice, but we want to ensure that all authorities, not just the best, act to eradicate fuel poverty. Local authorities need pushing to do what is right. The Government issued guidance in the year 2000 asking local authorities to report on fuel poverty activity under HECA. By the middle of last year, only 40 authorities had done so. 
 Many local authorities want these provisions in the Bill. They support the Bill, which includes the fuel poverty clause. A letter from Oldham council on 13 September 2001 stated: 
''Many families and individuals in this Borough suffer the effects of poverty e.g. poor housing and health. Therefore Oldham strongly supports any measures which will help alleviate poverty and deprivation.''
 So why remove references to fuel poverty? On 1 November 2001, Oxford council said: 
''This Bill would help Oxford City fight fuel poverty, improve home energy efficiency and reduce greenhouse gas emissions.''
 Again, the importance of fuel poverty is stressed. A letter from Dover district council on 6 November 2001 stated: 
''The Bill reinstates the 30 per cent. energy improvement target and provides for full co-ordination between local and central government . . . we strongly ask for your support to ensure that this Bill becomes law.''
 We should note the phrase 
''provides for full co-ordination between local and central Government''.
 That is what new clause 8 requires. 
 Manchester city council wrote on 6 November 2001: 
''The Bill would certainly be of benefit to the City Council . . . in reducing C02 and ending fuel poverty.''
 So why delete references to fuel poverty? A Hackney council resolution of 14 November 2001 stated: 
''Many people in Hackney suffer from fuel poverty with the elderly and young especially badly affected . . . the implementation of this Bill will improve their quality of life.''
 Again, the need to ensure co-ordinated action on fuel poverty is emphasised. That is exactly what this part of 
 the Bill is about. I could quote from East Lindsey, Havant, Shrewsbury and Atcham, Sunderland and many other councils, which strongly support the Bill, particularly part 2. The Committee should take those remarks as read. 
 Not much more needs to be said in defence of the inclusion in the Bill of provisions relating to fuel poverty. It is extremely important that the Bill contains those provisions and I hope that the Committee will support their inclusion. 
 I should like to cover one other area under this part of the Bill. For some reason the Government have decided that registered social landlords should not be included in the provisions of the Bill that concern fuel poverty. That is wrong. As I will point out later, when we debate part 3, registered social landlords should be subject to the same standards and targets as any other home owner, and I urge the Government to include them in the provisions of part 2. 
 I am left in something of a quandary. I do not understand the Minister's volte-face. As I have shown, it cannot be because the section is unnecessary and such guidance can already be given under the Home Energy Conservation Act 1995. It cannot be because to include provisions for such guidance in the Bill might imply that it cannot be done under HECA, and would thereby adversely affect the power to give guidance in Scotland, where the current Bill does not apply. I have dealt with that. It can only be that the Minister has been poorly advised. One should not be surprised, considering that his Department presided over flooding, fridges and foot and mouth, but I am. I believe that the Committee will show that we are disappointed in the Minister and require the Government to reconsider. It is for us on this Committee to put the matter right and to include in the Bill measures to eliminate fuel poverty.

Alan Simpson: I shall be relatively brief. Many of the views expressed by the hon. Member for Mid-Bedfordshire (Mr. Sayeed) will be shared by both sides of the House and by all members of the Committee. I want to put this in a slightly different context. I am loth to blame the Minister for our predicament although we could have done without the confusion about the Committee's sittings, especially the Minister, whose time is probably under greater pressure. Our predicament does not reflect a lackadaisical approach by the Government to the commitment to eliminate fuel poverty. The Minister has probably done more than anyone to ensure that fuel poverty is on not just the political but the legislative agenda of this Parliament.
 The issue of definitions to which the hon. Member for Mid-Bedfordshire referred is important. It is also contentious. I have sheltered behind the Minister at several conferences where the passionate views about the importance of getting the definition right come over with a degree of enthusiasm that is not far short of vehemence. I am pleased that the Minister, and not I, has to take that flak. The Minister more than anyone is aware of how important it is that we get the issue of fuel poverty right. 
 I suspect that the problems that we faced as a Committee result partly from confusion about whether clause 4 or new clause 8 is a duplication of what we can already do. The hon. Member for Mid-Bedfordshire was right to spell out in detail why that presumption was based on a misreading of the provision under the Home Energy Conservation Act 1995. I was involved in taking that legislation through the House and the powers that were given to Parliament under that Act were about the production of reports, not the delivery of a strategy to eliminate fuel poverty, which is the object of the Bill. 
 The Government have already made a commitment to eliminate fuel poverty within 15 years, which is why the words originally used by my hon. Friend the Member for Brighton, Kemptown sought to spell out the connection with fuel poverty in the Bill and why, in perhaps more eloquent terms, they are also included in new clause 8. I am not particularly precious about which of those alternatives should be used, but I endorse the point that it is essential for the credibility and parity of the Bill that we do not leave out references to fuel poverty. It is not an optional add-on or cake decoration, but central to one of the most important policy commitments made by the Government, which as yet awaits clarification not about their determination to achieve it, but about the mechanisms that they will use to achieve it. That is why it is important that, in one way or another, the Committee ensures that a clear reference to the elimination of fuel poverty is contained in the principal terms of the Bill.

Vincent Cable: I add my support and that of my colleagues to the comments of the hon. Members for Mid-Bedfordshire and for Nottingham, South (Mr. Simpson). They have covered much of the ground and we do not need long speeches on fuel poverty, so I shall simply make a few remarks.
 As the hon. Member for Nottingham, South stressed, we are debating a procedural problem and trying to find the best way of pushing forward the issue. There seems to be strong support from action groups, charities and local authorities in favour of the approach of incorporating, either in clause 4 or new clause 8, specific and strong powers on fuel poverty. I support that strongly. 
 On the broader issue, I simply make the point that it is easy to be complacent about fuel poverty. I believe that it is under control and that we are making good progress. However, I emphasise that the most recent studies that I have seen that compare British performance with that of the rest of Europe show that we are far behind countries such as the Netherlands and Germany on tackling fuel poverty. We stand as one of the weakest countries in Europe, alongside Ireland, so there must be constant pressure for action. 
 One reason why local authorities are so keen to have enhanced powers is that they are dealing with generations of neglect. Since building regulations were first introduced in the 1860s, the emphasis has been on 
 sanitation and damp for generation after generation. It was only recently that warmth became a central issue, so we have a large backlog of houses, many of which were put up hurriedly in the 1950s and 1960s because of the pressure of demand, and local authorities are now struggling with them. We need a sense of urgency to tackle the problem with the physical stock. 
 The hon. Member for Brighton, Kemptown made the point in his introduction that the new clause would not impose costs on Government or compliance costs on other authorities. We must bear in mind that as long as fuel poverty is neglected, there are costs to society. The national health service suffers costs, as do social landlords, who constantly have to deal with the problem of people seeking transfers. There is a cost issue, but it weighs in favour of strong action and legislation. 
 I simply reiterate the point that has already been made. I have looked through HECA and the Warm Homes and Energy Conservation Act 2000 and, as far as I can see, nothing in those two pieces of legislation gives powers of guidance or co-ordination. That is what we want, not the old process of issuing reports. Clause 4 and new clause 8 give those powers, which is why there is support for them on both sides of the House. If the legislation is to have real meat and teeth, one or the other must be included.

Michael Meacher: I apologise for being a few minutes late. I was unavoidably detained. I missed what my hon. Friend the Member for Brighton, Kemptown said, although I can probably imagine what that was.

Desmond Turner: No, I did not say that.

Michael Meacher: I shall read with interest in the printed version what my hon. Friend said.
 I listened to my hon. Friend the Member for Nottingham, South, and to the hon. Members for Twickenham (Dr. Cable) and for Mid-Bedfordshire. I wish that the hon. Member for Mid-Bedfordshire had not stumbled over himself repeatedly by making narrow political points. However, I accept the key point made by hon. Members that there is a general wish that the Bill should refer to the eradication of fuel poverty. I am sympathetic to that wish, and I believe that we can find a way to fulfil it. 
 The aim of clause 4 is to give the Secretary of State powers to direct energy conservation authorities on discharging their functions under the 1995 Act to help to implement the Government's fuel poverty strategy. Section 4 of the Act already confers on the Secretary of State the power to issue guidance on the preparation of energy conservation reports. The hon. Member for Mid-Bedfordshire said that it did not refer specifically to the eradication of fuel poverty. That is true, but the reports are drawn up in accordance with the Secretary of State's guidance, and there is no reason why they should not contribute to eradicating fuel poverty. 
 Amendment No. 36 proposes that clause 4 should be removed, as it is unnecessary. My amendment No. 31 makes it clear that the Secretary of State's powers should be extended so that she may give guidance on implementation of the measures in the report. We 
 expect the implementation of those measures to benefit the fuel poor. The fuel poverty strategy will therefore be a relevant consideration when the Secretary of State decides the appropriate guidance to energy conservation authorities. The amendment should not be interpreted as the Government backing away from their commitment to tackle fuel poverty. 
 I will not rise to the bait when the hon. Member for Mid-Bedfordshire talks about a volte-face. The only volte-face performed in the Committee is the hon. Gentleman's suddenly having an expedient interest in the eradication of fuel poverty. That interest was not reflected in the actions of the Conservative Government during their 18 years of office. The hon. Gentleman should not lead with a glass chin. As I said several times, fuel poverty tripled under that Government, and I will not take any lessons from him. As they say in another book, however, there is more joy in heaven over one sinner who repents than over 99 just men. It is excellent if the hon. Gentleman has joined us in our concern for fuel poverty. 
 I have not committed any volte-face. I am grateful for the comment made by my hon. Friend the Member for Nottingham, South, and I hope that what he said is true. I have done what I believe is necessary to make it true. We are deeply committed to seeking an end to fuel poverty, and I do not see how anyone could seriously deny that. Our fuel poverty strategy was published in November 2001, and we set a target to deal with most fuel-poor households, which include those of pensioners, the disabled, the chronically sick, and families on low incomes with children. One of the most effective ways of achieving that target is to improve the energy efficiency of homes. It is true that the Chancellor has made a welcome increase in fuel payments at Christmas. However, we do not want to assist the fuel poor to pay their bills when they are in badly insulated homes where most of the energy is wasted through the roof, doors or windows. We want, through energy efficiency, to reduce their fuel use while increasing the money that they have for fuel. 
 To help achieve that target we have established several domestic energy efficiency programmes. We have redesigned and increased the amount of money available under the old home energy efficiency scheme, a good scheme that we inherited from the previous Government. We have raised the limit for an individual household from £300 to £2,000. The new programme, which is marketed as warm front, provides considerably bigger grants for packages of insulation and heating improvements, including the installation of central heating, to those most vulnerable to cold-related ill health in the private sector. We have committed more than £600 million by 2004 to warm front. In addition, under the new energy efficiency commitment, which comes into effect in April, we have set a testing target for electricity and gas suppliers to achieve improvements in domestic energy efficiency; 50 per cent. of those energy savings must be directed at low-income consumers. 
 With that record, no objective person can say that our commitment is lackadaisical. It is the reverse of that. We are the first Government to put in place a target to end fuel poverty. As my hon. Friend the 
 Member for Nottingham, South said, we want to achieve that by 2016, and to put our money where our mouth is in supporting those major schemes. 
 I am happy with the new clause, which was tabled by my hon. Friend the Member for Brighton, Kemptown. It takes account of my concern that the existing clause 4 was over-prescriptive and it meets other requirements in that it does not repeat existing legislation. I can therefore embrace it in policy terms. My problem, which is one that all Governments must concern themselves with, is that any clauses that go into statute must be acceptable to parliamentary draftsmen. Unfortunately, the new clause was tabled rather late in the day—I make no criticism of that—and the response that I received from the parliamentary draftsmen on the new clause came just before the start of the Committee. Their opinion is that there are unresolved problems with the new clause, in terms not of policy but simply of terminology. Most of those problems are technical and I hope and believe that they can be readily addressed. One problem that they identify is that it imposes a statutory duty on authorities, which they say is unacceptably vague. It requires authorities to exercise their functions in ways that would ''complement and support'' the Government's fuel poverty strategy. Parliamentary counsel asks what that would mean in practice. The phraseology is not as clear as it needs to be. If we give people statutory duties, they have to know without dubiety what they are expected to do. 
 I apologise to members of the Committee that I have unfortunately not had the time to discuss the amendment and its full implications as I would have liked, with the promoter of the Bill and with parliamentary counsel. I was recently abroad on departmental business for a week and we then had the half-term break. I would like to do further work on the new clause and if, as I believe that we can, we find a satisfactory phraseology that builds the eradication of fuel poverty into the Bill—which I favour—I would ask my hon. Friend the Member for Brighton, Kemptown not to press his new clause. I will then withdraw my amendment, with the intention of tabling another new clause on Report that fully meets his policy requirements as well as those of the parliamentary counsel.

Jonathan Sayeed: The Minister said that he intended to introduce on Report a clause that seeks to build into the Bill the eradication of fuel poverty. Opposition members of the Committee take the Minister at his word. If that is his intention and if it achieves the aim of assisting the eradication of fuel poverty, we will accept his assurances. On that basis, I leave it to the hon. Member for Brighton, Kemptown to decide whether to support clause 4.

Desmond Turner: I thank the Minister for his helpful response to new clause 8 and for his generosity in accepting its policy principles. I also thank him for his offer of mutual withdrawal—[Laughter.]—so that we may join together to press the parliamentary counsel to produce a new clause that will be even better than new clause 8. I remain convinced that new clause 8 is an advance on the present clause 4 because
 it is much clearer. If parliamentary counsel can provide a means of injecting even greater clarity, I have no problem with that.

Sydney Chapman: If it does not sound too pompous, would it not be better constitutionally to leave clause 4 until the revised new clause 8 is introduced? Alternatively—and I am prepared to accept the Minister's view—could we not leave new clause 8, with all its faults, intact until the new proposals are drafted?

Desmond Turner: I thank the hon. Gentleman. That is precisely the import of what will happen. If the Minister's amendment and my new clause were withdrawn, clause 4 as drafted would stand. The attack on fuel poverty would therefore still be built into the Bill. I would expect the Committee to accept nothing less. I am happy to accept the Minister's assurances. I am grateful to the hon. Member for Mid-Bedfordshire for his generous attitude. I hope that we can retain the spirit of harmony that has pervaded the Committee throughout its proceedings. I accept my half of the mutual withdrawal.

Joe Benton: Order. I make it clear that we are deciding whether clause 4 should stand part of the Bill.
 Question put and agreed to. 
 Clause 4 ordered to stand part of the Bill.

Clause 5 - Houses in multiple occupation

John Baron: I beg to move amendment No. 51, in page 3, leave out lines 14 to 37 and insert
'''house in multiple occupation'' means a house which is occupied by persons who do not form a single household.'.

Joe Benton: With this we may discuss the following: Amendment No. 52, in page 3, line 14, leave out from 'house'' to end of line 25 and insert
'where its occupancy is or would be subject to more than one tenancy agreement whether written or verbal'.
 Amendment No. 53, in page 3, line 37, at end add— 
'(e) a building which has been converted into self-contained flats in accordance with Building Regulations; 
 (f) service tenancy agreements.'.
 Clause stand part. 
 Government new clause 7—Meaning of ''house in multiple occupation''— 
'(1) Section 345 of the Housing Act 1985 (meaning of ''multiple occupation'') is amended as follows. 
 (2) In subsection (2)(b), for ''by a single household'' there is substituted ''as a separate dwelling. 
 (3) After subsection (2) there is inserted—
''(3) The Secretary of State may make regulations prescribing—
(a) circumstances in which a person is, or is not, to be regarded as occupying a house, or
(b) circumstances in which persons occupying a house are, or are not, to be regarded as forming a single household.
(4) Regulations under paragraph (b) of subsection (3) may (without prejudice to the generality of that paragraph) secure that persons occupying a house are regarded as forming a single 
household only where there is a prescribed relationship between each member of the group and any one or more of the others (as the regulations may require).
(5) In subsection (4) ''prescribed relationship'' means any family or other relationship of a description specified in the regulations.
''(6) The Secretary of State may also make regulations prescribing descriptions of houses which (whether or not otherwise falling within the definition in subsection (1)) are not to be regarded as houses in multiple occupation within the meaning of this Part.
(7) Regulations under subsection (6) may frame a description of house by reference to any features of the house (including the nature of its use or occupation).
(8) Regulations under this section—
(a) may make different provision for different circumstances;
(b) may make incidental, supplementary and transitional provision; and
(c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.''.'.
 And the following amendments thereto: 
 (a), after proposed new subsection (3)(b) of section 345 of the Housing Act 1985 insert 
'(3A) Regulations made under subsection (2) shall include in any definition of ''house in multiple occupation'' a house occupancy of which is or would be subject to more than one tenancy agreement whether written or verbal.'.
 (b), in proposed new subsection (6) of section 345 of the Housing Act 1985, leave out from second 'of' to end and insert 
'buildings which are, or are not, to be regarded as houses'.
 (c), in proposed new subsection (7) of section 345 of the Housing Act 1985, leave out from first 'of' to '(including' and insert 
'building by reference to any features of the building'.
 Amendment No. 43, in title, before 'make' insert 
'to amend the definition of house in multiple occupation in Part 11 of the Housing Act 1985;'.

John Baron: I have tabled amendments because I am concerned that if the Bill's definition of a house in multiple occupation is allowed to stand, landlords will leave the sector, the sector will shrink and tenants, above all others, will be harmed.
 I have tabled amendments Nos. 51 to 53 and amendment (a) to new clause 7. Amendments Nos. 52 and 53 should be viewed together. Ideally, the Committee will accept amendment No. 51, and I shall not have to press Nos. 52 and 53; if it does not, I shall have to press the others to a vote. 
 At this point, I should declare an interest, as I always do on such occasions. I am a landlord and own two and three-bedroom flats and five and six-bedroom houses. 
 As I mentioned when the Committee last met, one of my concerns about clause 5 is that we may introduce too much red tape and too many costs—I am not talking only about licensing and registration fees. The private rented sector might then shrink, which would harm tenants. Now that we can table amendments that stand a chance of being discussed, I should say that the Bill's definition of an HMO is central to my concern. 
 I am aware that the Government have tabled new clause 7, and I shall include one or two references to it. 
 Before we get to it, however, I shall concentrate on the Bill as it stands. The Bill proposes to change the definition of an HMO from 
''a house which is occupied by persons who do not form a single household''
 to 
''a house occupied by adult members of more than two families.''
 New clause 7 raises the possibility of keeping single households within the definition of an HMO, but only where there is a prescribed relationship between each member of the group. 
 Whether intentionally or not, the Government have introduced a fundamental change, because the new definition will include landlords who let to house or flat sharers. As the law stands, three young professionals or students who reside in a three-bedroom flat and who have signed an assured shorthold tenancy—tenants and landlords freely enter into such agreements, which typically also involve a managing agent—would not be considered as an HMO. If the definition in the Bill is allowed to stand, such a property would not only be considered as an HMO, but could be liable to registration or licensing, depending on the local authority's attitude. We must recognise that that change would affect a huge proportion of properties in the private rented market, which have hitherto escaped registration or licensing schemes because they are not defined as HMOs. Until now, flat and house sharers have been seen as a single household. 
 The Bill is aimed at bedsit-type accommodation, and we are all in favour of eradicating slum landlords who provide substandard accommodation and take advantage of their tenants. If the definition is allowed to stand, the Bill will cast its net far too wide and will cause a shrinkage in the sector, as happened in Scotland. 
 The new definition would cover a group of friends, for example students, who sign an assured shorthold tenancy, and who are, therefore, jointly and severally liable. In that situation, there is one agreement and a sense of community. There is no sense of community in bedsit accommodation with slum landlords, where there is a lock on each bedroom and the tenants operate independently. The slum landlord has more opportunity to take advantage of the situation, and I wholeheartedly agree that we should address that problem. However, local authorities have the power to intervene in such situations because the machinery to confront slum landlords already exists. For example, closure notices can be issued by local authorities to deal with overcrowding. Local authorities can also issue section 352 notices to ensure that certain works are implemented on a property, often within 21 days, so one does not have to wait long for improvements to take place. 
 Changing the definition of an HMO is like taking a sledgehammer to crack a nut. It is entirely unnecessary and will harm tenants because it will restrict the supply of accommodation and restrict choice. If we over-regulate, initiative and enterprise will stand less chance of success, which would be a shame for the private 
 rented sector. A little history may be helpful in this context. 
 The Housing Act 1988 introduced assured shorthold tenancies. That removed the restrictions placed on the market by the earlier rent Acts, which gave tenants security of tenure and left landlords unable to obtain vacant possession. In effect, the Housing Act 1988, reinforced by the Housing Act 1996, freed up the rental market. It is, therefore, no surprise that, according to the figures of the Department for Transport, Local Government and the Regions, the private rented sector declined to a low point in 1989, with about 1.7 million tenancies in existence. In the year 1999–2000, it increased to 2.3 million tenancies as a result of the liberalisation of the market. That is evidenced by the fact that, again according to figures from the DTLR, between 1999 and 2000, the number of assured shorthold tenancies increased from approximately 500,000 to 1.5 million, while the number of regulated tenancies decreased from 600,000 to 200,000. 
 There can be little doubt from those figures that the Housing Acts of 1988 and 1996 revived the sector, but Britain still has a far smaller rented sector than many other European countries. A healthy rented sector is vital to the national economy as it assists mobility in the workplace. With modern labour practices, the days of a job for life are behind us and the labour force will have to be much more mobile. Therefore, mobility of labour is extremely important. 
 A healthy private sector market is also in the nation's best interest because it helps education. The sector provides much-needed accommodation for students. That will increasingly be the case if the Government are to meet their education targets, especially the measures that they are introducing on further education. However, we are contemplating a Bill that, by changing the definition of an HMO, will threaten the sector to an extent and make for its contraction. 
 We must remember that the sector comprises mostly small operators who could readily invest elsewhere. For example, they could invest in commercial property. Many people think that there are massive profits to be made or massive profit margins in the private rented sector, but that is not the case. If there were, there would be far more corporate investors. The sector typically comprises people who invest in one or two properties at most to supplement their income, often for retirement. 
 There is a danger that a good number of those people will leave the market because of wholesale licensing schemes that could be enforced by local authorities. Meanwhile, the small minority of people who disregard the law—we all want to get rid of them—will continue to do so anyway. Our job is to make life as difficult for them as possible, without harming the vast majority who are perfectly reasonable landlords. 
 We need only consider the chaos in Scotland to see what can happen. Mandatory licensing for HMOs was introduced on 1 October 2000. The relevant legislation allowed great variation between local authorities in 
 terms of fees set and the requirements that those authorities sought. We all know that vastly different fees were charged as a consequence. I am conscious that new clause 7 would limit the fees to £112 per letting, so that issue is covered to an extent. However, local authorities have also placed a wide variety of requirements on HMO landlords. 
 UNITE, which specialises in providing student accommodation, has supplied figures about a case in Glasgow in which bills over and above registration fees amounted to £10,000. That involved simply making an application in respect of HMOs. In the end, such fees will be passed on to tenants. As a result of legislation, there has been a noticeable reduction in the availability of properties, especially at the lower end of the market, and that affects students. I ask the Committee seriously to consider that. We do not want the Bill to affect the availability of such accommodation.

Richard Bacon: My hon. Friend is on the subject of student accommodation and UNITE. Has he read the student living report published by UNITE, which described a level of student accommodation of which many students, including me when I was one, could only dream? Does he agree that policy should be directed towards encouraging such companies, which provide high quality accommodation at affordable prices, rather than reducing supply?

John Baron: Yes, I have seen that report. It reinforces the point that we have to allow operators as much freedom as possible, especially in terms of the provision of student accommodation. We must not tie them up in red tape and costs, as we must ensure a decent supply of student accommodation. That has not been the case in the Scottish experience and tenants, especially students, have been made to suffer.
 It may be anathema to some Labour Members, but I believe that if we care about driving up standards, the best way to do so is to encourage healthy competition. The more choice tenants have, the more they will gravitate to better accommodation and the more landlords will be prepared to invest. Landlords will not invest if there is too much interference from local authorities as a result of widespread registration; they will simply invest in other forms of property—commercial property, for example—or leave the market altogether. Meanwhile, those landlords who do remain will simply pass on registration costs to tenants, who will have little choice but to pay as a diminishing amount of accommodation will be available to them. In the end, it is the tenants who will suffer. The landlords have a choice as they can leave the market, but tenants need accommodation. 
 I shall make three or four more points about widening the definition of HMOs, the first of which relates to planning. The extension of the definition of HMOs to include properties with more than two families could sweep into the definition nearly all shared houses. Such a definition would result in recategorisation for planning purposes. If a property is categorised for planning purposes as an HMO, there 
 is no assurance that the planning authority in question will give the landlord the ability to recategorise for single occupancy when the property is sold. 
 In several incidents recently, local authorities have tried to restrict the power and use it to the detriment of the local housing market. For example, in Hammersmith and Fulham and in Camden, reports state that local authorities, worried about the availability of—

Joe Benton: Order. The hon. Gentleman's remarks are leading towards amendments Nos. 45 and 46, which will be discussed later. I ask him to return to the amendment.

John Baron: Thank you, Mr. Benton. I shall do so.
 Hon. Members have all spoken in favour of the purpose of the Bill, which is ostensibly to encourage energy conservation, and includes targets to ensure that that is achieved. However, I question whether part 3, and the licensing of HMOs, will make a significant contribution to achieving that goal. HMOs represent about 40 per cent. of the total private rented sector and within HMOs, 25 per cent. represent shared housing. It must be assumed that local authorities are aware of the location of those HMOs. Therefore, only a proportion of them will not meet the energy-saving targets in full. Although the proposal may be of some help, it is superfluous to achieving the aim of parts 1 and 2: the eradication of fuel poverty. It is not quite an afterthought but it is not essential to the success of the Bill, and I ask the Committee to think about it. 
 I am worried about the definition of an HMO in clause 5, although I am conscious that new clause 7 brings in a modified definition. What is a family, nowadays? What will be prescribed relationships? A family is not an easy concept to define and the courts will be kept busy determining the definition. For example, could a family include non-marital relationships? Could it include homosexual relationships, or monogamous relationships for both heterosexual and homosexual groups? Are prescribed relationships to be based on friendship or on sexual relationships? Those questions must be asked or there will be confusion in the implementation of the Bill, which we are keen to support. Part 3 threatens the clarification of what is applicable. 
 We should examine local authorities' records. We are enabling them to have a much greater say in the running of HMOs, particularly from an energy and fuel point of view, but greater involvement in the sector is not necessarily a good thing. Indeed, local authorities' record of managing residential properties varies from area to area, and some can be very bad. Without wishing to name examples—although I have them here, if any hon. Member is interested to find out after Committee—more than half of council homes fail to meet government standards in some local authority areas. In some instances, as many as 5,000 homes are described as unfit for human habitation. If those homes were in the private sector they would be closed down, and yet we are asking those authorities to start ruling on the condition of HMOs, which will leave room for all sorts of discrepancies. The latest results from the Government's survey of English housing 
 show that the highest levels of customer satisfaction are among, believe it or not, private tenants. The report by the Department for Transport, Local Government and the Regions indicates that nearly twice the proportion of council tenants say that they are dissatisfied with their landlords than those in the private sector—about 20 per cent. compared with roughly 10 per cent. 
 In moving the amendment, I am suggesting that we revert to the old definition, which has broadly worked, and allow the courts to decide whether there is a discrepancy in determining what is an HMO. We should allow the sector to expand as it has done in recent years, as it helps the economy and government policies on education and, above all, gives tenants greater choice. We have seen what can happen when a market shrinks because of over-regulation, as happened recently in Scotland, or planning issues, as we have seen in Hammersmith and Fulham, where the number of HMOs has declined markedly. There are difficulties with the proposed new definition of an HMO in both new clause 7 and the Bill. How does one define a family or a prescribed relationship? Although local authority involvement in the private rented sector may be good in some cases, it is not necessarily so and could cause a great deal of irritation to many landlords for no good reason. 
 Finally, as I have said on many occasions, I wholeheartedly support parts 1 and 2 in trying to eradicate fuel poverty. However, part 3 is largely superfluous to that aim. If we want to drive up standards in the private rented sector, healthy competition should have a major part to play. Part 3 would negate healthy competition, and on that basis I commend the amendment to the Committee.

David Drew: I shall raise mainly technical questions for the Minister, but I must respond to the comments of the hon. Member for Billericay (Mr. Baron), which I generally support. He has probably had some of the same briefings as me. My starting point is the misconception that, with HMOs, we are always talking about older properties that are in need of repair, which is why energy conservation and the need to address fuel poverty are so important.
 New and corporate landlords—UNITE is an obvious example—are entering the area of accommodation for students and people who work in the national health service. I am sure that we can all think of new blocks being built in our own areas that will take care of people on a multiple-occupancy basis, but which take anything but the usual form of such units of accommodation. 
 There is a difficulty inasmuch as clauses 5 and 6 run together, and we cannot sort out a definition of houses in multiple occupation without talking about registration and the fees that will be charged. However, I will restrict my remarks to clause 5. My right hon. Friend the Minister will move new clause 7, which I hope will clarify some of the issues. There are 
 good ideas in clauses 5 and 6, and I hope that if I ask some technical questions, the Minister can help me through this. They are mainly about what is currently in the Bill. I am a little confused about whether we will deal with self-contained flats through the new clause, and if so where they stand with the definition of HMOs. 
 Much of the accommodation to which I am referring and the hon. Member for Billericay had recourse to consider is university halls of residence and accommodation for health service employees. Where do they stand with regard to the new clause? That matters because the definition of HMOs will have a significant impact on the registration of such buildings and units within buildings and, more particularly, the fee structure that will apply. 
 I agree that there are problems, and there are precedents on which we can call. Scotland provides the obvious one. There seems to be a differential between what different local authorities in Scotland have done on charging fees. I am aware that that relates to clause 6, but the definition is so important that if we can get it right, we can perhaps help to ensure that the registration process and the fee that follows are also correct. 
 The final issue is how we treat the different elements of these newer units of accommodation. It would be helpful if my right hon. Friend would clarify whether private sector operators who work in partnership with public sector institutions will be treated in the same way. If a private operator provides accommodation on behalf of a university, there should be parity in the treatment of the registration and the fee structure that applies. It would be unfair if the university charged one fee for its own accommodation, but the private deliverer of similar accommodation had a different fee structure. 
 The main point is that we must get this legislation right. It is about encouraging new people into the sector as well as dealing with what already exists. Although in certain respects I disagree with the hon. Member for Billericay, the measure is important. HMOs are an important part of the way in which we consider fuel poverty and its eradication.

Richard Bacon: I support the amendment tabled by my hon. Friend the Member for Billericay, although not because amendments Nos. 45 and 46, which we shall reach later, stand in my name. In light of the earlier exchange between the Minister and the hon. Member for Brighton, Kemptown, however, I am tempted to say, ''I'll support yours if you support mine.'' I offer support because I agree with much of what my hon. Friend said about the existing position and defining a single household. That has probably been made over-complex. Indeed, if we consider the new clause—
 It being One o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Four o'clock.